You’re at the office and your mechanic calls to let you know that your car’s tail lights aren’t working. Not only that. He also asks if you’re available to make an appointment for the repair. How did he know? Your car reported the failure through a sensor connected to the mechanical workshop. Life is much simpler that way. That’s why many experts predict an increase in connected devices in the coming years. Communication between devices allows the passage of data and this, in the business environment, is an innovation that opens up a world of possible applications. We are in the field of Internet of Things (IoT). Let’s find out the meaning and benefits of the Internet of Things for businesses.
What it is and what you can do with IoT
Internet of Things (IoT) is a neologism that describes a network of physical devices connected through the use of sensors, software, and technology. The purpose is to allow these devices to exchange data and information. These features facilitate, for example, the monitoring of automated tasks by reporting failures in a short time and initiating the maintenance process.
Networked devices also enable remote controls, which are useful in the healthcare sector to monitor patient health or control processes in manufacturing. All of this translates into significant time savings and problem resolution, in some cases, without intermediaries.
Today, we are surrounded by connected objects in domestic places but also and especially in industries. Precisely because of the wide diffusion in the productive sectors another term has been coined: Industrial Internet Of Things (IIoT).
What are the real benefits of the Internet of Things?
In general, the benefits related to the implementation of IoT in the company concern organizational, productivity and customer satisfaction aspects. And this is only a part of the benefits. The best results are achieved when IoT is combined with Automation and Artificial Intelligence.
Here’s a summary, from the report compiled by Microsoft, “IoT Signals Boost Wave Energy Spotlight,” showing the impact of IoT in energy companies.
Reducing costs and increasing efficiency with IoT
Smart objects don’t replace people, but they do perform the routine and automated tasks that make the work of resources alienating and in many cases a waste of time. Here’s an example: if I have a company that deals with car leasing and I have a huge fleet of cars, the installation of a control unit that provides information remotely (km traveled, fuel levels, etc.) allows me effective management but at the same time a significant reduction in costs.
The networking of objects, machinery, processes, generates a huge amount of data to be processed. The reading of some of these has an immediate effect on the modification of production processes or on the resolution of failures, for example. Other data, which seem to be of no immediate use, if properly analyzed, serve to optimize and improve decision-making, strategy, and create benefits that impact all departments. A path that, in the long run, generates efficiency and cost savings. Only through the analysis of information and the consequent modification of actions and processes will we be able to get the most out of the investment made to connect devices to the network.
Reducing human error
Although a single action or omission may be the immediate cause of an incident, closer analysis typically reveals a series of events and deviations from safe procedures, each influenced by the work environment and the broader organizational context (Vincent et al., 1998 – Excerpted from Human Error by James Reason).
Human error is inevitable. This does not mean accepting it, but making a constant effort to implement technologies and solutions that will reduce the risk of generating it. There are more delicate areas where concentration and speed of action are required and where it is worth investing. For example, in production companies, an error may be repeated on several products in a short period of time, generating a large amount of waste. The quality control of the MES, which interfaces with IoT technologies, allows detecting the information collected by the sensors present on the production line and evaluate anomalies in real-time. Once the alert is received, timely action is taken to optimize the process before producing waste.
What are the benefits of the Internet of Things for businesses? Reduced costs and errors; increased efficiency and productivity; the improved customer experience. Click To Tweet
While exploring the potential of IoT in improving business operations and customer experience, it’s equally important to consider the wider impact of digital transformation on our society. For a deeper analysis of how technology is shaping the future of businesses and communities, we invite you to read the book ‘Toward a Post-Digital Society – Where Digital Evolution Meets People’s Revolution’, which addresses the key changes that await us in the future.
Increased employee productivity
The digitalization of processes also has an impact on team coordination. New technologies and smart working, in the realities that have been able to exploit their potential, have already improved the work performance of employees. The Internet of Things has interconnected departments, increased the mobility of employees but has also affected their safety. An example? Wearable devices, widely deployed in the consumer market as fitness support or as an extension of smartphones, have also proven important for monitoring employee health or monitoring workers working in risky environments. What technologies are generating increased employee productivity? In addition to IoT, all mobile, cloud and Artificial Intelligence technologies.
Cisco, a global leader in networking and IT, has made an estimate of the connected devices per capita in the coming years: they will be 3.6 by 2023 compared to 2.4 in 2018, while the objects connected to each other will increase from 33% to 50%.
The benefits of the Internet of Things also involve consumers
The initial example of the mechanic receiving car data and setting up a troubleshooting appointment is just one of the many ways IoT offers businesses to improve the customer experience.
Increasing customer satisfaction is a significant benefit for B2C businesses. Sending data from devices in the home such as the refrigerator, washing machine or oven allows the manufacturer to remotely detect anomalies, assess how they are operating and analyze, for example, the level of wear and tear on consumable items. The communication of these data allows the resolution of problems, in some cases even remotely, the planning of marketing campaigns oriented to specific targets and the creation of new products and services, more performing and increasingly personalized on the final customer.
In companies, the increase in customer satisfaction translates into solutions designed around their needs, possibly thanks to the large amount of data provided as feedback. In fact, we are starting to talk about Servitization, that is, selling the product accompanied by a series of services that increase its perceived value.
The risk of IoT: cybersecurity
The Internet of Things offers important benefits for businesses but the networking and data flow generated by this intelligent universe must be properly protected.
“One of the most important aspects involves a robust plan to keep the system secure. 84% of existing Internet of Things adopters say they have experienced at least one system security breach, with the most common issues being malware, spyware and human error. 93% of executives expect Internet of Things breaches in the future”
Kevin Ashton, the British engineer who coined the term IoT.